Problems of Islamic Finance

https://twitter.com/fmunirWorld/status/533537478590738432
KASB Bank was established by the family who plundered people in the name of religion back in 80's under the scam of Bokhari Motor...


https://twitter.com/RaziDada/status/533530380553289728
Bokhari Motor scam was first scam in the name of religion (Shia victims), second was Taj Co (Brelvi victim) and now Modarba scam (Deobandi)


http://indianexpress.com/article/opinion/columns/pakistan-banks-pak-bank-quran-newsweek-pakistan/
"My favourite lawyer, Salman Akram Raja, representing the State Bank of Pakistan, told the honourable court that “the Constitution specifically mentions the elimination of interest,  but does not define interest or riba”. He said, “The economy thrives on instruments, including taxes and loans, and that the country, in its economic interest, should stay in touch with the global financial system.” The court that had banned “riba” in 1992, decided to hear the case again “after vacations......

My favourite lawyer, Salman Akram Raja, representing the State Bank of Pakistan, told the honourable court that “the Constitution specifically mentions the elimination of interest,
but does not define interest or riba”. He said, “The economy thrives on instruments, including taxes and loans, and that the country, in its economic interest, should stay in touch with the global financial system.” The court that had banned “riba” in 1992, decided to hear the case again “after vacations”.
- See more at: http://indianexpress.com/article/opinion/columns/pakistan-banks-pak-bank-quran-newsweek-pakistan/#sthash.yXtE5XzG.dpuf

"Turkish scholar Timur Kuran, who has written on the economic history of Islam, blames the usury law for the vacuum of financial institutions in the past and the resultant emergence of the Muslim man as a marauding warrior rather than a businessman. He writes: “The emergence of banks in Europe led long-term British interest rates to drop by two-thirds leading up to the Industrial Revolution. No such drop occurred in the Arab world until the colonial period.”  Trying to explain why Pakistan is making such heavy weather of “riba”, the book An Introduction to Islamic Finance: Theory and Practice (2008) says the term is not an economic theory and there is nothing in the Quran and hadith to make us believe that it is so. The Quran prohibits riba, but is not clear about what constitutes riba. Later, exegesis was needed and Muslim jurists have decided that any money begetting more money was wrong, and no transaction in which the lender didn’t “share risk” with the borrower was permitted. Riba is still to find its correct expression in English. Literalism hounds them when Muslims take a Quranic verse and don’t rationalise it through context."...
"Of the many “double Shahs” of Pakistan, one was truly big. Syed Sibtul Hassan Shah, known as “Pir Double Shah”, was famous for doubling the money deposited with him in 70 days. A majority of his clients were police officers, lawyers, teachers, shopkeepers, villagers, farmers and household wives. He died this year after being arrested for not delivering on the Rs 12bn he had collected. Many Islamic scholars who embezzled money like this have been let off because of their irreproachable piety and their “background” strength from the “non-state actors".

http://archives.dailytimes.com.pk/editorial/09-Nov-2008/book-review-islamic-banking-has-arrived-by-khaled-ahmed
"It is clear that the city-state of Madina had the same sort of problems from the money-lenders as the city-state of Athens because Plato railed against interest as did Aristotle whose dictum 'money will not beget money' was taken literally centuries later by Muslim jurists. Democracy in Athens was derailed because power passed from the Assembly to the money-lending oligarchs. The borrower, not the lender, had to be protected. On the other hand, today it is the savings account-holder who should be defended by the State Bank against malpractices of the borrowing bank of both sorts, conventional and Islamic."

http://tribune.com.pk/story/967875/modaraba-scam-accused-court-issues-arrest-warrants-notices-to-surety-givers/
"Ayubi, Hussain Ahmed and Muhammad Khalid were booked for allegedly committing corruption and cheating the public at large in the ploy of the Islamic mode of investment.
They were arrested for their alleged involvement in the Rs3.2 billion Modaraba scam. The suspects ran a grocery store chain called “Mezban” in various cities."

Of the many “double Shahs” of Pakistan, one was truly big. Syed Sibtul Hassan Shah, known as “Pir Double Shah”, was famous for doubling the money deposited with him in 70 days. A majority of his clients were police officers, lawyers, teachers, shopkeepers, villagers, farmers and household wives. He died this year after being arrested for not delivering on the Rs 12bn he had collected. Many Islamic scholars who embezzled money like this have been let off because of their irreproachable piety and their “background” strength from the “non-state actors” - See more at: http://indianexpress.com/article/opinion/columns/pakistan-banks-pak-bank-quran-newsweek-pakistan/#sthash.yXtE5XzG.dpuf

https://www.dawn.com/news/1351120
12 August 2017:

ISLAMABAD: An accountability court on Friday convicted seven persons in the multi-billion rupees Modaraba scam.

According to the verdict announced by the judge Nisar Baig main accused, Mufti Shabbir Ahmed Usmani and Sajjad Ahmed, will undergo eight years rigorous imprisonment. The judge also imposed a fine of Rs5 million on each of them.

The court awarded two years imprisonment to Qamar Shehzad and Faisal Sultan and each of them will pay a fine of Rs2.6 million.

Saifur Rehman, Mohammad Adil and Mohammad Fiaz were awarded one year imprisonment each and they will pay a total fine of Rs1.1 million. Since the accused were in custody for several months, therefore, the court ordered to exclude their detention period from their term.

Turkish scholar Timur Kuran, who has written on the economic history of Islam, blames the usury law for the vacuum of financial institutions in the past and the resultant emergence of the Muslim man as a marauding warrior rather than a businessman. He writes: “The emergence of banks in Europe led long-term British interest rates to drop by two-thirds leading up to the Industrial Revolution. No such drop occurred in the Arab world until the colonial period.”
Trying to explain why Pakistan is making such heavy weather of “riba”, the book An Introduction to Islamic Finance: Theory and Practice (2008) says the term is not an economic theory and there is nothing in the Quran and hadith to make us believe that it is so. The Quran prohibits riba, but is not clear about what constitutes riba. Later, exegesis was needed and Muslim jurists have decided that any money begetting more money was wrong, and no transaction in which the lender didn’t “share risk” with the borrower was permitted. Riba is still to find its correct expression in English. Literalism hounds them when Muslims take a Quranic verse and don’t rationalise it through context.
- See more at: http://indianexpress.com/article/opinion/columns/pakistan-banks-pak-bank-quran-newsweek-pakistan/#sthash.yXtE5XzG.dpuf